How SK-II blends ecommerce and social for improved brand perception

JD.com’s Joey Bian outlines how cosmetic giant SK-II blended data from two of China’s biggest ecommerce and social sites to improve both brand perception and ROI.

Earlier this year, SK-II was one of a number of global brands selected to trial a new targeted advertising tool for the Chinese market, which draws on data from online retailer JD.com’s 188 million active purchase customers and the 800 million monthly active users (MAU) of Tencent’s social messaging app WeChat.

Alibaba has been the country’s dominant ecommerce player with its C2C and B2C online marketplaces Taobao and Tmall.

However Tencent is making moves to disrupt Alibaba’s lead through an increasing number of commerce features on its WeChat social messaging application, including wallet capabilities, and the strategic partnership it formed with JD.com in 2014. (Tencent currently holds an 18% share in JD.com).

If you want to learn more about WeChat, this short video gives an introduction to China’s social commerce landscape with an excellent overview of the app and why western tech companies are now trying to emulate it.

https://www.youtube.com/watch?v=CxI5TIXJlbA&app=desktop

Joey Bian, head of ad tech strategy and innovation at JD.com says a key challenge for brands in China, is how to leverage ecommerce with social platforms to improve brand perception and marketing ROI simultaneously. Here’s how SK-II implemented the JD.com /Tencent tool during a Chinese New Year campaign in February 2016.

Case study: SK-II

SK-II is a mature brand in China. It had two objectives when piloting the Tencent / JD.com brand and marketing tool:

1. Maintain its loyal customer base

2. Convert prospective customers into purchasing customers

This four-step methodology was used to achieve this.

1. Define the target

SK-II’s two target groups were:

Loyalists. These were consumers who had purchased SK-II products over the previous year on JD.com.

Prospects. These were consumers who had had interaction with the SK-II brand on both the JD.com and Tencent ecommerce and social platforms.

2. Create relevant experiences for each segment

Data from JD.com was used to identify which consumers had purchased an SK-II product in the past 12 months – these users were placed in the loyal consumer segment group. The data was then used to go a step further, by identifying who in the loyal consumer segment group was visiting and searching for SK-II product pages on the JD.com site in preparation for a possible next purchase.

These users were then targeted with an add unit in their WeChat moments feed. The add featured a six-second video and also gave the consumer the opportunity to join the brand’s official WeChat account.

Data sets from JD.com and Tencent were used in a similar way to identify prospective customers – those who had had ‘interactions’ with the brand on either of the platforms but were yet to be converted. These consumers were shown a video in their moments feed which had a greater emphasis on brand education and led to a push for them to follow the brand’s official WeChat account.

3. Build connections with the right tools

Chinese users are busy, but they open the WeChat app more times in a day than any other app, says Bian. Therefore, WeChat had a stronger percentage of probability in reaching these SK-II consumers because this target group opens the app a lot more often than say a news app. Disseminating the two video ad units on WeChat was deemed one of the best tools for the brand to build connections.

To reach a younger consumer segment, the same methodology was also applied to users on Tencent’s QQ messaging service.

4. Measurement

ROI for the two segments – loyal consumers and prospective consumers – were measured differently. For the SK-II loyalists, the metric was conversion rates. The conversions for repurchasing of the loyal consumer group was five to six times more than for those loyal consumers who had not been exposed to a video ad unit.

The prospective customer campaign saw SK-II gain 20,000 new followers on its official WeChat account in just a number of days – a process which would have taken two months without the campaign, says Bian.

Case study 2: LeEco

The device was launched on April 26, but a prelaunch campaign began a week earlier. Using the combined data of JD.com and Tencent’s WeChat, ads and targeted messages could be sent to ‘high potential’ audiences. When it came to launch day, LeEco sold 50,000 phones in 10 minutes. A further 250,000 units were sold in the following 15 days after the launch.

What’s special about social commerce in China?

Brands in China are continuously trying to use social platforms for brand education, says Bian. “The challenge is how do you prove the value of that brand education because usually brand education takes a long time and you don’t always have control over your customers on social platforms. You know that they follow you but you don’t know if they are loyalists or are just following you for some other reason,” he says.

Combining the data of an ecommerce platform with that of a social site, empowers brands to target specific consumer groups for any number of objectives whether that is for a product launch (in the case of LeEco), loyal customer retention, cross sale or upsell, to preventing attrition.

Bian’s advice to newcomers to the Chinese is market is do your research.

“Do your research before you even start thinking about product positioning, targeting and budgeting. In the first place, look at the marketing niche or category you are trying to enter – what’s the competitive landscape of it, what’s the historical performance of foreign brands in China and what can you learn from them,” he says.

Three points to consider for China market entry:

1. Differentiation. How do you differentiate yourself? How are you different from existing brands in China?

2. Once you have figured out your positioning you need to define your target audience and you need to create a brand strategy in order to convince people that they should choose you and stay with you.

3. Finally, budgeting matters. You always want to be able to be nimble. As a new brand in China you probably don’t have that much brand recognition. You want to be able to see the ROI of each channel investment you make.

*To learn more about social commerce in China and the marketing opportunities around this, join us at ClickZ Live Shanghai on September 20-21 at the Andaz, Xintiandi, where Joey Bian is a keynote speaker. Click here for more information or contact Polly Hochio at polly.hochio@clickz.com to receive a copy of the agenda and secure your spot.